India's auto-making state of Haryana has ordered a 35% increase in minimum wages, following days of worker protests and factory boycotts over rising living costs linked to the ongoing U.S.-Israeli military campaign against Iran, Reuters reported on Friday.
The state government said it would raise the monthly minimum wage for unskilled workers to $165, up from roughly $120, effective April 1. The move is expected to provide relief to factory workers while adding to cost pressures on India's automobile industry, already contending with higher raw material prices and disrupted supply chains stemming from the Iran conflict.
"Whatever we get, we have to be happy," said Akash Kumar, 25, a worker at auto supplier Munjal Showa, who noted that food prices had roughly doubled in recent weeks.
The announcement came a day after police clashed with demonstrators in Manesar, an industrial hub some 30 miles south of New Delhi that is home to Maruti Suzuki and hundreds of component suppliers. Reuters spoke with more than 30 workers who said factory output had been disrupted across multiple auto suppliers this week.
India is the world's second-largest importer of liquefied petroleum gas and is grappling with its worst gas crisis in decades, according to Reuters. The federal government has curtailed industrial gas supplies to protect household cooking gas availability, but the disruption has pushed up costs for eateries and small businesses, with some migrant workers leaving Manesar to return to their villages.
Automakers including Tata Motors and Mahindra have already raised vehicle prices, while Maruti Suzuki has warned of a similar move, Reuters reported. Industry executives said supply chains could take weeks to normalise even if diplomatic talks between the United States and Iran result in a de-escalation.
Vinod Kumar, president of the India SME Forum, told Reuters that employers were offering meals and small bonuses to retain workers, and that the group was seeking government support for emergency measures including cluster-based communal kitchens. "Once labour leaves, it is very difficult to get them back," he said.
A state official, Ajay Kumar, urged workers in a video address on Friday to resume duties peacefully, Reuters reported, adding that workers at several facilities had returned to work after being informed of the wage increase.